Calculating tiered sales commissions
Tiered commissions reward progress toward quota: the closer the rep gets and the more they exceed it, the higher their rate.
The principle of tiers
You define quota attainment thresholds (e.g. 70%, 90%, 100%, 120%) tied to increasing rates. The rep earns the rate of the highest tier they reach, applied to their revenue.
Adding an accelerator
Above 100%, an increased rate (accelerator) rewards overachievement and motivates exceeding the quota. Be sure to keep the plan readable and budgeted.
Our generator calculates the whole team's commissions and exports an Excel file with the IF formulas.
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